Axel Kaufmann ApS, a prominent clothing retailer, has confessed to breaching the Danish Competition Act's prohibition on anti-competitive agreements. The company, along with two senior employees, will pay substantial fines.

The case forms part of a broader complex, in which Hugo Boss Nordic ApS ("Hugo Boss") unlawfully exchanged information with two retailers, Axel Kaufmann ApS ("Kaufmann") and Ginsborg, concerning prices, discounts, and/or quantities related to future sales. Hugo Boss acts as a supplier on a vertical level to the two clothing retailers, but is also a competitor on a horizontal level, as it sells Boss products in its own stores. The fact that the supplier was also active in the same market rendered the exchange of information a violation of competition law. 

In 2020, the Danish Competition Council ruled that several clothing retailers, including Kaufmann, had breached competition law. Subsequently, both the Danish Competition Appeals Tribunal and the Maritime and Commercial Court upheld the decision, confirming that the information exchange was illegal. 

The decision finds that Hugo Boss and Kaufmann exchanged information from January 2014 to November 2017 with the intention of restricting competition. 

As described, Hugo Boss serves as both manufacturer and supplier of clothing and, simultaneously, operates its own retail stores. Hugo Boss disclosed confidential information to Kaufmann regarding prices, discount levels, sale timings, quantities, and specific items on sale in Hugo Boss' retail stores. This enabled Kaufmann to adjust its own promotional strategy, including deciding which products to offer discounts on, which to exclude from discounts, and when to hold sales. 

The decision underscores the importance for retailers to be vigilant about upholding relationships that are both horizontal and vertical. Furthermore, it demonstrates the necessity of establishing clear boundaries between competitors, even within a supplier relationship, to avoid entering into anti-competitive agreements. 

The ruling also highlights the significance and potential benefits of cooperating with authorities, as Kaufmann's acknowledgment of the fine was considered a mitigating factor. 

However, the legal proceedings are not yet concluded for all involved parties, as other aspects of the case are still pending in the judicial system.

For more information, or further guidance in this area, please contact Morten Nissen or Nanna Sofie Krabbe. 

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